Tax on non-ISA savings interest

chinadog1

Hi,
In January 2025 I got a tax bill for interest accrued on non-ISA savings for the 2023-2024 year. I agreed with the amount (£3668, of which £2668 was taxed at the 20% rate). My tax code was adjusted accordingly.
A few weeks later in February 2025 I got another tax bill for a similar amount (approx £3100 interest) and my tax code was further reduced to collect the extra tax. This time no explanation was given for this extra bill and I didn't query it at the time. 
Is it reasonable to assume that HMRC have made an estimate on my savings interest for the 2024-2025 year based on the previous year's figures? 

Cheers

Isthisforreal99

chinadog1 said:

Hi,
In January 2025 I got a tax bill for interest accrued on non-ISA savings for the 2023-2024 year. I agreed with the amount (£3668, of which £2668 was taxed at the 20% rate). My tax code was adjusted accordingly.
A few weeks later in February 2025 I got another tax bill for a similar amount (approx £3100 interest) and my tax code was further reduced to collect the extra tax. This time no explanation was given for this extra bill and I didn't query it at the time. 
Is it reasonable to assume that HMRC have made an estimate on my savings interest for the 2024-2025 year based on the previous year's figures? 

Cheers

Depends what you got in February 2025, you say another bill but for what year? Was it actually a tax calculation?

Normally HMRC would use the exact same figure for your 24/25 tax code as used for 23/24.

HMRC seem a little late this year in producing actual 24/25 calculations which should show the actual interest reported to them

chinadog1

The second bill from February didn't mention a year, just the extra amount that I owed without a calculation. 
At the time I did a little internet searching and found this
"HMRC will estimate how much interest you'll get in the current year by looking at how much you got the previous year". 
I assumed this is what they've done for the 24/25 year as they are always behind which is annoying.

eskbanker

chinadog1 said:

The second bill from February didn't mention a year, just the extra amount that I owed without a calculation. 
At the time I did a little internet searching and found this
"HMRC will estimate how much interest you'll get in the current year by looking at how much you got the previous year". 
I assumed this is what they've done for the 24/25 year as they are always behind which is annoying.

You should be able to see the calculation of the 2024/25 coding within your online personal tax account if you didn't receive any coding notices at the time?

Isthisforreal99

chinadog1 said:

The second bill from February didn't mention a year, just the extra amount that I owed without a calculation. 
At the time I did a little internet searching and found this
"HMRC will estimate how much interest you'll get in the current year by looking at how much you got the previous year". 
I assumed this is what they've done for the 24/25 year as they are always behind which is annoying.

So what did the 'bill' look like, is it a potential underpayment shown in a tax code adjustment?

It's not a case of being behind, it'a that they don't receive the information until 2 or 3 months after the end if the tax year.

chinadog1

I don't have an online account with the HMRC, I'm on PAYE so have never needed one in the past. I'll check the exact wording on the letters when I get home from work and report back.

chinadog1

The wording on the letters says untaxed interest @ £3168 which is correct for 23/24 and "less adjustment for tax you owe earlier year" (£3173). It doesn't say what year though. I understand the calculation for the first amount but there isn't a calculation for the second amount, just a new tax code 622L, which is a combination of the two figures above.
It does say on note 3 on the reverse of the letter that I owe £1269 tax in total and this will be collected in equal installments.
Should I create an online tax account to sort this out?